Are you are using secure ssh sftp? For me also, sftp is working fine on some other machines. This is the only machine where we have secure ssh installed.

I think key here this paticular version of sftp:

sftp -V
sftp: F-Secure SSH 3.1.0 (build 12) on sparc-sun-solaris2.8

Is it possible for me to have two different vesions of sftp installed on same machine???